• Carmakers have finally woken up to the need to back the battery supply chain
  • Ford gets busy, inking MoUs with Australia’s Rio Tinto, BHP, Syrah and Ioneer in the space of a day

The big legacy carmakers have been playing catch-up to Tesla and China’s BYD for a while now when it comes to backing the EV supply chain.

But they are quickly realising that, as former Pilbara Minerals (ASX:PLS) boss Ken Brinsden was fond of saying, they were asleep at the wheel.

Prices for lithium are out of this world, trading around US$75,000/t for hydroxide, US$73,000/t for carbonate and US$6500/t for spodumene in Asian spot markets.

That’s an indication of how few raw materials are available to be traded on the open market for an industry that continues to grow in spite of a potential global economic slowdown.

Enter Ford Motor Company, the iconic US car brand that founded the modern production line.

It wants to produce 2 million EVs a year by 2026, something that will require a hell of a lot of lithium. It is now signing MoUs with any lithco that can walk.


Ford goes to Rio

The headline deal is Ford’s MoU with Rio Tinto (ASX:RIO), the world’s second largest mining company.

Rio is the lone major which has dipped its toe into lithium, which BHP (ASX:BHP) has so far shunned. While its attempts to develop the Jadar mine in Serbia have so far proven an unmitigated disaster, its US$825 million acquisition of the Rincon Lithium Project in Argentina this year delivered a second entry point into the market.

Rio says it will work with Ford towards a “significant lithium off-take agreement” at Rincon, but there are other metals in focus.

It will also look to supply low carbon aluminium using its zero carbon Elysis smelting technology and from its hydropowered smelters in Canada, as well as copper which Rio currently mines in Mongolia at the Oyu Tolgoi mine and across North and South America, including at its massive Escondida JV with BHP.

Rio has already supplied aluminium for the F-150, the world’s first all-aluminium body pick-up truck, something that saves weight, helping Ford’s model tow heavier loads, accelerate faster and reduce its stopping distance.

A full-size electric truck is now on the cards.

“This is a powerful example of how Ford’s proven scale and industrial expertise can be leveraged to accelerate the shift to EVs,” Ford’s chief industrial platform officer Hau Thai-Tang said.

“We’re applying years of shared knowledge and a strong relationship to support production of models customers already know and love – and potentially to help create a new generation of EVs for millions of customers.”

What about nickel? They’re after that too, joining Tesla and Toyota in the line of customers for BHP’s nickel sulphate crystals from its Nickel West division in WA.

Ford could come on board as an offtaker from 2025 onwards as it looks to get ahead of the game on the materials needed to fill its EV orders in the future.


And the juniors too

Ford hasn’t stopped there, not by a long shot.

It already has a 150,000tpa offtake deal with Liontown Resources (ASX:LTR), to which it is also advancing a $300 million loan to help construct the Kathleen Valley Lithium Mine in WA.

Now US lithium explorer Ioneer (ASX:INR) and graphite miner Syrah (ASX:SYR) are on its supply list as Ford looks to lock down any battery metals it can.

$1.1 billion capped Ioneer, which last year picked up a major investment from South African giant Sibanye-Stillwater, owns the Rhyolite Ridge project in Nevada, where it aims to produce 20,600t of lithium carbonate or hydroxide and 174,400t of boric acid a year over a 26-year mine life from 2025.

34% of that lithium carbonate will be hoovered up by Ford to supply BlueOval SK, its battery manufacturing JV with SK On.

The five-year, 7000tpa deal will begin from 2025, with Ioneer planning to enter production in the back half of the year.

“Simply put, this strategic relationship means Nevada lithium for American cars, and it will lead to job creation across all levels of the electric vehicle supply chain,” Ioneer MD Bernard Rowe said.

“We look forward to continuing to work with Ford and its partners to help develop a secure and reliable end-to-end US EV industry.”


$900m capped Syrah Resources has also entered a non-binding MoU with Ford and SK On to supply the BlueOval JV, with graphite from its expanded Vidalia anode plant in Louisiana.

Syrah already has Tesla on board as a customer for 8000t of active anode material from Vidalia, which will have a capacity of 11.25ktpa with production targeted to begin in the September quarter of 2023.

The Ford-SK MoU will rely on testing and qualification of Vidalia active anode materials, with plans to finalise a binding offtake deal by the end of 2022. Offtake commencement will start no later than 2028, with BlueOval planning to develop large-scale battery manufacturing facilities in Tennessee and Kentucky.


Ford MoUs share prices today: